Mitek Systems Management Discusses Q4 2013 Results - Earnings Call Transcript

Nov. 7.13 | About: Mitek Systems (MITK)

Mitek Systems (NASDAQ:MITK)

Q4 2013 Earnings Call

November 07, 2013 5:00 pm ET

Executives

Peter M. Salkowski - Analyst

James B. DeBello - Chief Executive Officer, President, Secretary and Director

Russell C. Clark - Chief Financial Officer and Principal Accounting Officer

Analysts

Mayank Tandon - Needham & Company, LLC, Research Division

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

Michael J. Grondahl - Piper Jaffray Companies, Research Division

Bhavan Suri - William Blair & Company L.L.C., Research Division

Operator

Greetings, and welcome to the Mitek Reports Fourth Quarter and Full-Year Fiscal 2013 Financial Results. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce you to your host, Peter Salkowski, Investor Relations for Mitek. Please go ahead.

Peter M. Salkowski

Thank you, Brock. Good afternoon, and thank you for joining us. Before I turn the call over to Jim DeBello and Russ Clark, I'd like to cover a few items.

This afternoon, Mitek Systems issued a press release announcing its fourth quarter and fiscal 2013 financial results. That release is available on the company's website at www.miteksystems.com.

As a reminder, this call is being broadcast live over the Internet to all interested parties, and audio of this call will be archived on the Investor Relations page of the company's website.

Before we begin, I'd like to remind everyone that on the call, we will discuss certain factors that are likely to influence the business going forward. Any factors discussed today that are not historical facts, particularly comments regarding our long-term prospects and market opportunities, should be considered forward-looking statements. These forward-looking statements may include comments about our plans and expectations of future performance. Forward-looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially. We encourage all of our listeners to review our SEC filings, including our most recent 10-K, and any of our other SEC filings for a more complete description of these risks.

Our statements on this call are made as of today, November 7, 2013, and the company undertakes no obligation to revise or update publicly any of the forward-looking statements contained herein, whether as a result of new information, future events, changes in expectations or otherwise for any reason.

Additionally, throughout this call, we will be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8-K describes the differences between our non-GAAP and GAAP reporting and present the reconciliation between the 2 for the periods reported in the release.

And with that, I'd like to turn the call over to Jim DeBello, President and Chief Executive Officer of Mitek Systems. Jim?

James B. DeBello

Well, thanks, Peter, and good afternoon, everyone. Mitek had a terrific year, achieving a 63% increase in revenue over fiscal 2012. Over 20 million consumers have used the Mitek's Mobile Deposit technology, according to estimates by Celent Research.

During fiscal 2013, Mitek strengthened its position as the leading innovator of mobile imaging for financial transactions, a category we created. Today, we stand stronger and more diversified with momentum going into 2014.

One year ago, we set out to surpass 1,000 banks using our best-of-class Mobile Imaging technology, diversify our Mobile Imaging product line, broaden our patent portfolio and penetrate new markets. Today we have broader, more diverse IP, deeper and more relevant products, a stronger balance sheet, seasoned management team and double the number of customers using our technology within retail banks, insurance companies and brokerages.

We ended the fiscal year with 1,420 financial institutions signed for Mobile Deposit, an increase of 856 from a year ago. We also transformed our product line, adding several new Mobile Imaging products to our portfolio. Two top 20 U.S. retail banks, U.S. Bank and BBVA Compass, went live with Mobile Photo Bill Pay. And we recently announced the imminent commercial launch of Mobile Photo Balance Transfer with U.S. Bank. Lastly, we introduced Mobile Photo Account Opening, which won Best of Show at Finovate, and subsequently entered into a partnership with Experian, a worldwide leader in risk management.

We're convinced that our Mobile Imaging solutions provide the best consumer experience to millions of people. We continue to invest in our world-class Mobile Imaging platform and have developed Mitek MiSnap. MiSnap will provide touchless capture across all of our solutions. A customer simply hovers their phone over a check, bill or driver's license, and a photo is automatically captured without touching the shutter. And what's easier than that? Consumers will now have a common way to capture information from any document. And during the year, we completed a secondary offering, which brings us to a healthy $29 million in cash on our balance sheet.

Mobile banking continues to flourish with 3 of the largest U.S. banks reporting over 40 million active mobile banking users. Just last week, American Banker said about mobile banking growth, "It's not stopping or even slowing down." They reported that bank customers did more banking tasks on their mobile phones in September than ever before.

The world is changing in a way that's great for Mitek. There's a billion mobile devices out there with cameras. We want everyone of them to use our technology which transforms the camera into a keyboard. This isn't just about consumers sharing photos with each other. Consumers are getting in the habit of using their cameras to complete financial transactions.

Let's take a look now at what's happening in the market. First, mobile was viewed as an add-on, a nice to have. Lets call this mobile also. Then, due to evolving consumer behaviors and smartphone proliferation, companies began designing new applications for consumers, who viewed mobile, not as a nice to have, but as a need to have. Let's call this, mobile first.

Now we are seeing, both from our customers and independent industry experts, the rise of a new consumer, for whom mobile is not the best digital channel, but the only digital channel they use. Let's call this group mobile only.

Our customers are telling us that the number of mobile only consumers they see continues to climb steadily. What do mobile only consumers want? They want convenience. They want speed, parity with every other channel, use cases that just don't mimic existing channels, but enable unique experiences by leveraging the power of smartphones and tablets. These changes are very exciting for the industry and particularly exciting for Mitek, since our Mobile Imaging products don't try to replicate an online process on the mobile phone, but instead, are designed from the ground up with mobile in mind. These trends, coupled with the synergies associated with offering more than 1 Mobile Imaging solution, makes us confident that a growing number of our customers will embrace a multiproduct Mobile Imaging platform strategy.

Our products serve the entire financial life cycle of a retail banking consumer. From account opening to deposits, bill payments and even shopping for a better credit card. Increasingly, we are seeing the adoption of more than 1 of our mobile solutions. U.S. Bank is a prime example with 3 Mitek Mobile Imaging solutions.

Mitek also experienced success moving into 2 new markets. We work with 2 of the top 5 insurance companies with Mobile Photo Quoting. We also initiated a Mobile Photo Bill Pay pilot with a major national direct biller. As we continue to enhance our solutions to fit the needs of the 21st century mobile consumer, we're confident we'll see even more opportunities in new markets.

On today's call, I'll highlight some of the events that occurred in Mitek's fiscal fourth quarter and discuss areas of focus for Mitek in fiscal 2014.

Starting with Mobile Deposit. 1,420 financial institutions have licensed Mobile Deposit and 805 have commercially deployed the product. That's an additional 361 signed and 246 live, our highest quarter-over-quarter increase. Mitek's Mobile Deposit technology is deployed by all of the top 10 retail banks in the U.S. As the #1 feature sought by mobile banking users, we believe that Mobile Deposit has driven consumer adoption of mobile banking.

Take the recent example of Boeing employees credit union, the largest credit union in the State of Washington. Boeing introduced Mobile Deposit in November 2012. Within the first several months, the Mobile Deposit adoption rate exceeded their forecast by 200%. In another example, ING Direct also just launched new TV spots, featuring Mobile Deposit in both English and French for the Canadian market, featuring Bigfoot, a mermaid and a tooth fairy, they're hilarious. And you can view them on YouTube by searching ING Direct.

With an estimated 20 million users, there's now a large base of consumers, who are potential users of additional Mobile Imaging solutions from Mitek. We think banks and other companies will need to provide secure, fun and convenient ways to offer their services via mobile in order to maintain their competitive position. This is the thinking behind our entire suite of Mobile Imaging solutions, including Mobile Photo Bill Pay, which I'll touch on next.

Mobile Photo Bill Pay is just a cooler way to pay a bill. Javelin Research says that 40% of active mobile bankers expressed a desire to use Mobile Photo Bill Pay. It's really simple to use. After a user takes a picture of the bill through the financial institution's app, Mitek's technology auto-populates the fields required to make a mobile payment. That means paying a bill is as easy as taking a picture. No more keystrokes, and no need to make a payment via the post office.

As of the end of September, we had 14 financial institutions signed for Mobile Photo Bill Pay, and 9 of these were live. And the list continues to grow. On Tuesday this week, we announced that First Bank, a bank with $13 billion in assets, will be the first regional bank to offer Mobile Photo Bill Pay. Financial institutions that have offered Mobile Photo Bill Pay are experiencing significant first-mover advantages. These include higher checking account balances, stronger customer loyalty and lower customer churn. But paying a bill, doesn't always happen through a bank. In fact, only 15% of all bills are paid via bank's online systems, and that's why they're interested in deploying our Mobile Photo Bill Pay product to increase that. But retail banking is just the first market for Photo Bill Pay. Most of us pay bills directly to our service providers, such as a cable company, a telco, or even a utility. That's why, we believe Photo Bill Pay can be used by many industries. In fact, any company that bills their consumers directly.

Recently, we implemented a pilot with a leading national communications company to enable their customers to pay their bills using our Mobile Image technology. While still in the pilot phase, we're very excited about the results and are seeing interest from other billers for the same concept. As you can imagine, we're working very diligently to expand adoption across all of these opportunities.

Now moving to the latest addition to our Mobile Imaging portfolio, Mobile Photo Account Opening. Have you ever tried to open an account online? It's a tedious process with lots of keystrokes. But in a mobile first world, there's a lot of people who want to open accounts on their phone or tablet, and they want to do it quickly with the fewest keystrokes. In fact, Javelin reported in July that nearly 90 million people attempted to open an account on a mobile device or online last year, with over 25% giving up and abandoning the process. This is the problem that our Mobile Photo Account Opening product solves.

During the fiscal fourth quarter, Mitek debuted our newest product at Finovate, the leading technology forum, for bank executives. Our award-winning Mobile Photo Account Opening product addresses a major need in the market.

Our solution enables the user to open and fund an account in as few as 60 seconds. A user can breeze through the process by taking a picture of his or her driver's license. A user can also take the picture of a check to immediately fund the new account, combining our Mobile Imaging assets. In its debut at Finovate, we were very pleased to see that Mobile Photo Account Opening left people buzzing, with one critic calling it a breakthrough, and we were excited to take home the Best of Show award. This was followed by a U.S. News & World Report article on the future of money that used Mitek's Mobile Photo Account Opening as "the way of the future."

Mitek also recently partnered with Experian. This collaboration allows customers to seamlessly integrate Mitek's Photo Account Opening with Experian's Precise ID fraud detection and prevention platform and has resulted in several sales leads.

Working with the best-in-class consumer fraud detection companies further enhances our innovative Mobile Imaging solutions.

Mobile Photo Account Opening can be deployed for practically any type of account opening. You can imagine that this is an equally painful process for consumers in other markets, ranging from e-commerce to healthcare, insurance and social media. We think of our Photo Account Opening solution as a great product with great potential.

Adding to our suite of mobile solutions is Mobile Photo Balance Transfer. How many times have you received a credit card offer in the mail? If you're like me, you end up shredding a lot of paper. Well, after piloting Mitek's Mobile Photo Balance Transfer over the past few months, San Diego County Credit Union has experienced a 75% increase of mobile balance transfers since beginning their advertising. These are valuable new customers for their credit card and a lot more efficient way to acquire customers compared to the costly direct-mail programs of the past. Happy bank, happy customer and a very happy Mitek.

Last week, we announced that U.S. Bank will make balance transfer available to all of its mobile banking consumers later this month. U.S. Bank, the fifth largest bank in the U.S., is an excellent example of a customer using multiple Mitek Mobile Imaging products. As I mentioned before, this is their third.

As additional customers sign up for multiple products, we believe they'll experience a positive portfolio effect. The benefits include the ability to provide a consistent user experience and the opportunity to interact with customers, multiple times a day. I might note that our ability to deploy several solutions on our Mobile Imaging platform is unique and a competitive advantage for Mitek.

At this point a year ago, I discussed several focus areas for fiscal year 2013. One of these areas was to diversify our product offerings. We executed on this in 2013 with the successful launches of the Bill Pay, Account Opening and Balance Transfer.

Another focus for fiscal 2013 was to reduce the volatility of our reported revenues. And we delivered four consecutive quarters of at least $3 million in revenue. As we move into fiscal year 2014, we feel that we have momentum and are in a strong position with unique and highly desirable products in the market.

This brings me to our priorities for fiscal year 2014. We're very excited about the number of customers who are deploying and developing their mobile platforms by offering more than 1 Mobile Imaging product for Mitek. By using Mitek's mobile offerings, there's a great opportunity for these institutions to attract new customers and strengthen their relationships with existing customers.

First, we'll increase the number of Mitek mobile solutions deployed by existing customers. Second, we'll invest in our product platform to maintain our first-mover advantage and continue to provide the best-in-class experience. And lastly, we'll adapt our existing technology to provide mobile imaging for financial transactions outside of banks.

As I stated earlier, fiscal 2013 was a very successful and transformative year for Mitek. We expect to see additional successes in fiscal 2014 and we'll continue to be the leading innovator in mobile imaging for financial transactions.

With that, I'll now turn the call over to Russ.

Russell C. Clark

Thanks, Jim, and hello, everyone. As I review the numbers, all figures are on a GAAP basis unless I describe them as non-GAAP. We provided a full reconciliation from GAAP to non-GAAP with the earnings release, which is posted on our website. I'll begin with the fourth quarter results.

Total revenue for the fourth quarter of fiscal 2013 was $4.4 million compared to total revenue of $1.2 million for the year-ago period. This is our best quarter since launching Mobile Deposits in 2008.

Fourth quarter revenue was comprised of approximately $3.3 million in license revenue, including revenue from 8 Mobile Deposit reorders and $1.1 million in maintenance and professional services or PS revenue. This compares to a year earlier software revenue of approximately $500,000 and maintenance and PS revenue just under $700,000.

Total operating expenses were $5.9 million compared to $4.2 million in the year-ago period. The year-over-year increase was primarily driven by higher investments in R&D, selling and marketing to grow the business, as well as litigation costs related to protecting our intellectual property rights.

Noncash stock compensation expense during the fourth quarter of fiscal 2013 was $746,000 compared to $616,000 in the year-ago period.

Now breaking down Q4 expenses by category, selling and marketing expenses were $1.7 million compared to $808,000 in the year-ago period. As we discussed previously, we have hired additional personnel to support our direct sales efforts, as we continue to extend the product portfolio and go to market for our Account Opening, Bill Pay and insurance products.

R&D expenses were $1.8 million in Q4 compared to $1.6 million in the year-ago period. Areas of focus include continuing to enhance the user experience for our products by providing industry-leading technologies and functionalities, such as Mitek MiSnap, the touchless capture technology Jim described a few minutes ago.

G&A expenses were $2 million during the fourth fiscal quarter compared to $1.5 million in the year-ago period. The year-over-year increase in G&A was primarily driven by IP litigation expenses. Our IP litigation expenses were around $700,000 during the fiscal fourth quarter. We currently expect fact discovery in the USAA case to be completed around the end of calendar year with expert testimony expected to continue through at least the first quarter of calendar 2014. The court has not yet set a trial date for this case. Given where we are in the process, we are expecting litigation expenses to be moderately higher than they have been in the past few quarters.

GAAP net loss was $1.5 million or $0.05 per share compared to a net loss of $3 million or $0.12 per share in the year-ago period. Non-GAAP net loss in the fiscal fourth quarter was $725,000 or $0.02 per share compared to non-GAAP net loss of $2.4 million or $0.09 per share in the year-ago period.

Non-GAAP net loss excludes stock compensation expense and our EPS share count for the fiscal fourth quarter was approximately 30.3 million basic and fully diluted shares.

We expect total fiscal first quarter of 2014 OpEx to be between $5.25 million and $5.75 million, excluding litigation expenses, as we continue to invest to grow the business.

Now looking at full fiscal year, revenue for fiscal 2013 totaled $14.8 million, of which $10.7 million was software licenses and $4.1 million was maintenance and PS. Our 63% year-over-year revenue growth was fueled primarily by Mobile Deposit. But we did see revenue diversification increase with Bill Pay and insurance quotation also making meaningful contributions to the mix.

Although our recurring base of maintenance revenue has grown to around $1 million per quarter, it is important to note that the predictability of our quarterly revenue is still highly dependent on the timing of closing Mobile Deposit's block transaction licenses.

We're continuing to address this issue by offering more recurring pricing models for our newer products. These models include platform fee plus recurring transaction fee pricing, as well as recurring only subscription pricing.

Total operating expenses for fiscal 2013 were $22.1 million compared to $17 million in fiscal 2012, as we invested in growth during fiscal 2013. Gross margins were 89% in fiscal 2013 compared to 86% for fiscal 2012, resulting primarily from a higher mix of license revenues from our mobile products.

GAAP net loss for fiscal 2013 was $7.3 million or $0.26 per share compared to a net loss of $7.8 million or $0.31 per share in fiscal 2012. This is based on 27.5 million shares in fiscal 2013 versus 25.1 million in the year-ago period. Excluding stock compensation, non-GAAP net loss for fiscal 2013 was $4.5 million or $0.16 per share compared to non-GAAP net loss of $5.2 million or $0.21 per share in the year-ago period.

Stock compensation for fiscal 2013 was $2.8 million compared to $2.6 million in fiscal 2012. As of September 30, 2013, our headcount was 65 employees.

Turning to the balance sheet. As of September 30, 2013, cash, cash equivalents and investments totaled $29 million compared to $14.6 million at September 30, 2012. The increase in cash was primarily driven by the secondary offering, which brought in $16 million this summer.

Our accounts receivable balance of $1.5 million represented a DSO of 31 days for the fiscal fourth quarter. While we continue to be very pleased with our collections results last several quarters, I would like to remind everyone that our DSOs remain much lower than our historical averages.

That concludes our prepared remarks.

Operator, please open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions] The first question today comes from Mayank Tandon of Needham & Company.

Mayank Tandon - Needham & Company, LLC, Research Division

Jim and Russ, could you provide any clarity on the transaction growth? I think in the past few quarters, you've talked about transaction growth and maybe, I missed it, but I just wanted to get a sense of what that number is tracking towards?

Russell C. Clark

Mayank, it's Russ. We did have strong sequential quarterly transaction growth this fourth quarter for our Mobile Deposit product. We did not get to the 25% sequential growth we've been reporting in prior quarters, just law of large numbers. At some point, it's more difficult to continue at that pace. But growth was still strong. You can see by the customer counts and the live counts that banks continue to adopt this technology, and growth was still strong this quarter.

Mayank Tandon - Needham & Company, LLC, Research Division

Okay. And then, just staying on the theme, in terms of license revenue, could you give us a breakdown of how much of the revenue came from your newer offerings, specifically Mobile Bill Pay and the Mobile Imaging solutions?

Russell C. Clark

Yes, Mayank. We haven't disclosed revenue by product line. I think in my prepared remarks, I mentioned that Mobile Deposit was the most significant factor in driving that quarterly and year-over-year revenue growth. However, we did have meaningful contributions from Bill Pay and Insurance. And you've seen some of the announcements and comments on customer accounts there on larger banks with Bill Pay and 2 of the top 5 PNC insurance carriers. So those pricing models have tended towards the hybrid model with the platform fee upfront and recurring transactional fees over time. So there was contribution during the year for Bill Pay and Insurance, with respect to both platform fees and some of the recurring transactional revenue.

Mayank Tandon - Needham & Company, LLC, Research Division

Okay. And I know you don't give any guidance, but I wanted to see if you had any in thought in terms of how we should think about fiscal '14 developing? Is there any seasonality we should consider? Any specific clients coming online, that may impact the model one way or other during the course of the year? Just some inputs in terms of how fiscal '14 may end up looking like?

Russell C. Clark

Sure. We did hits last quarter and continued into this quarter that million-dollar mark of recurring and maintenance revenue. So we do have to go out and hunt and be able to close down the rest from a growth perspective. From a seasonality perspective, with our fiscal Q1, ending December coincides with the end of CapEx, and expenditure cycles for lot of calendar year companies. So we have seen, if you look at historical trends, a little bit more headwind going into our fiscal Q2, which is the March quarter. So I think if you could look back last couple of years, you'll see that trend from a seasonality perspective.

Mayank Tandon - Needham & Company, LLC, Research Division

Great. And just a few final questions. One, any clarity you can provide on pricing front, particularly as it relates to your mobile check deposit? Is that pricing still holding firm? Or have you seen any changes? And then, I also just wanted to get your thoughts on the competitive landscape? Anybody making noise out there that you're concerned about?

Russell C. Clark

Yes, Mayank. On the pricing side, again, as you can see from the customer counts, they continue to increase, had our largest increase on customer signings during the quarter. Our pricing model for Mobile Deposit is the same. We generally have multiyear agreements with our channel partners there with that pricing. So again, strength in the business from customer account perspective and longer-term agreements in place.

James B. DeBello

And Mayank, this is Jim. A little bit to the competitive landscape. This is a great market. And I think it's evidenced by the number of large companies, both retail banks and beyond, brokerages and other types of industries, who now have an interest in Mobile Imaging. So we see it growing, and as a result of it, we're going to expect competition. So there's a handful of people who've entered the market recently that we're aware of ranging from groups like Kofax to groups like Jumio, a privately held company, and others. But so far, we haven't run across them in competitive situations. We expect that ultimately we will. But having first-mover advantage and best-of-class technology, I think, is to our great advantage.

Operator

The next question comes from Tom McCrohan of Janney.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

How many reorders were there this quarter? And I apologize, if you already mentioned that.

Russell C. Clark

Yes. Sure, Tom. I did report 8 reorders for Mobile Deposit during our fourth quarter.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

And were any of them unusually large, now define as relative to prior quarters like any big one, big significant deal this quarter, out of the 8?

Russell C. Clark

Yes, Tom, what I would say is the distribution of deals in the reorder count that we disclose really hasn't changed in terms of what we typically see there any given quarter. Meaning that, in any given quarter, if we look at our full bucket of Mobile Deposit orders, whether they're initial orders or reorders, there are some larger orders, maybe for a larger named end user bank that could occur less frequently. And we have deals on the smaller end that occur more frequently but are lower in dollar size. So it's a large distribution, whether it's initial orders or reorders.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

And the people who are reordering out of the 8, are they reordering capacity for next 12 months? Or is there any change in how much capacity they're buying relative to historic reorders?

Russell C. Clark

Yes. In terms of the velocity of the reorders, I don't know that I could characterize any trends there. I think, depending on all the different characteristics of any given channel partner, end user customer, when new capital budgets open up, how much are they advertising, how much is their transactional growth going -- there's a wide spectrum of kind of median time between reorders and order size.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

Okay. And when they do re-up, are they re-upping for the same amount that they did previously or...

James B. DeBello

We've seen some -- yes, some on the smaller end that are making smaller orders seem to be more consistent in terms of the number of transactions that they're buying. And we've seen some larger institutions, who maybe come into it a little more cautious, reorder more after they see their transactional usage increase and are more comfortable with uptake and adoption rates with their users.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

And my last question, sorry, on the reorders. How many of the reorders came in and were signed the last week of the quarter?

Russell C. Clark

Yes, Tom, the color I'd give you on that, maybe not specific to reorders, but we have seen as the business has matured, and the number of customers has increased, a larger pool every quarter, some ability to get deals signed earlier in the quarter. But I think, in general, we've seen that over last few quarters here, and that's helped us produce the results that we have the last 4 quarters.

James B. DeBello

Tom, this is Jim. I think just to add to that. The cadence of the business has become very good, very regular. And so we're seeing orders come in throughout the entire period of the quarter. And I think that's a good sign for our company's growth and also, for predictability of our revenue streams as we continue to grow.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

That's good to hear. And it's a question on expenses, and I'll jump off. In terms of headcount trends, what should we be thinking going into 2014?

Russell C. Clark

Yes. we ended up the year at 65 heads, we probably hired a little more than a dozen during the course of the year. I wouldn't expect that we would hire more than that going into this next year.

Operator

The next question comes from Mike Grondahl of Piper Jaffray.

Michael J. Grondahl - Piper Jaffray Companies, Research Division

Of the 805 banks that are live with Mobile Deposit, what percent of those do you think are aggressively marketing the product or the offering versus just sort of making it aware, making it available to their banking customer?

James B. DeBello

That's an interesting question. This is Jim. Let me answer that, somewhat. Clearly, you've seen the Chase ads, and that's been a great opening pitch in the game several years ago. But the recent launch of the ING Direct commercial campaign in North America, and primarily in the Canadian markets, is tremendous. That's our first international campaign that we've seen in both English and French. But we've also seen the banks, that aren't nearly as large, equally who put their efforts and resources behind this. Conestoga Bank in the Philadelphia area does interesting things. They run truck billboards, and they have individuals, who are in the community promoting Mobile Deposit. We've statement stuffers from credit unions. We've seen the San Diego County Credit Union doing blitz on TV and local media, promoting the benefits of Mobile Deposit. So we really see this percolating into the vocabulary of the banking consumer on the retail side, and that's having ancillary benefits to us. Now we're seeing the commercial side of the business, the people who deal with businesses, small businesses, promote Mobile Deposit for them to be able to deposit checks. So as a result of these large and small efforts and large national campaigns and small localized campaigns, the word is getting out. It's almost become now viral. And I think it's a very important transition for Mitek that we discovered in 2013. Before, a lot of push into the marketplace in advertising. Today, a lot of word-of-mouth coming from individuals who are introduced by their bank to this and tell their friends. And that's why there's such exponential growth in the number of consumers.

Michael J. Grondahl - Piper Jaffray Companies, Research Division

That makes a lot of sense, and I completely agree with it. But at the individual live bank level, the ones that actually go that step further and do that, let's call it, aggressive marketing, do you see -- do they get paid back by more customer usage because they do it?

James B. DeBello

We don't have any evidence of that. But undoubtedly, that wouldn't be the case, and probably would be the result of the direct advertising to encourage more use at the bank, and they get the halo effect of being the technology innovators.

Michael J. Grondahl - Piper Jaffray Companies, Research Division

Okay. And then on Mobile Bill Pay, you mentioned you were getting some recurring fees there. Is there anything to take away from, I guess, the banks, where you're getting those recurring fees based on usage and sort of what early usage trends look like?

Russell C. Clark

Yes, Mike, it's still fairly early on in the cycle on from a Bill Pay perspective to have a large enough amount of meaningful data on transactional usage. So although our pricing model for Bill Pay does include the platform fee and the transactional usage fee, generally, the bulk of the revenue contribution during the year has been platform fees as the banks have gone through the implementation cycle and gone live and started producing transactions.

Michael J. Grondahl - Piper Jaffray Companies, Research Division

Okay. And then last question is just on Mobile Photo Account Opening. Is the initial target market there, the banks you're already talking to? Or is it enterprises outside the financial world? I mean, it seems like that could apply to a lot of industries, a lot of consumer companies and whatnot. Where are you going first?

James B. DeBello

It certainly does apply to a lot of industries, Mike. Clearly, we have a strong foothold within the retail banking environment with over a thousand banks who are using our technology, so it's natural for us to extend those relationships by offering other Mobile Imaging solutions. And key among them is Mobile Photo Account Opening. There was tremendous response when we presented at Finovate from bankers in the audience who said, "Gee, that's a problem we're trying to solve."

Getting people to sign up for accounts is not easy. And to do it through a mobile first way, a method by which you can take a picture of your driver's license and automatically populate the data fields, is much more convenient for the user. This is a game all about consumer experience. And that's what we offer at Mitek, a better way and a more convenient consumer experience. So it's resonating with the banks right now. They are already putting it into pilot, and we expect it -- to see in 2014, new accounts offering this. So absolutely right, those who are Mobile Deposit customers are natural targets for Mobile Photo Account Opening, Balance Transfer and Bill Pay. In addition to that, and I want to underscore, we do see opportunities in other areas. And so we have business development efforts with firms outside of the retail banking space that we think are very attractive. But by the way, one of those could easily be credit card issuers. So think how big that is, there's 224 credit cards for every 100 American citizens.

Michael J. Grondahl - Piper Jaffray Companies, Research Division

Yes. I would think there's a lot of applications for that account opening.

James B. DeBello

Yes. Mike there is one other thing. This, potentially, has a global impact. It's not only a U.S. issue. This is a -- it's a worldwide issue. As I mentioned earlier, those billion devices out there that have cameras, many of those folks are trying to open accounts or do interesting things to enroll in new services.

Operator

The next question comes from Bhavan Suri of William Blair.

Bhavan Suri - William Blair & Company L.L.C., Research Division

I guess, my first question to you is you saw a nice uptick in reorders, and you've now had a number of quarters of sort of pretty solid, consistent reorder rates. You've got some nice maintenance stream. If you look at the recurring revenue, and you look at the visibility of that, what percentage of revenue would you say, at this point, you feel comfortable calling recurring?

Russell C. Clark

Yes, Bhavan. I think as I mentioned earlier, the million dollars in maintenance revenue, that's part of our maintenance and PS line, is really our starting point for recurring revenue. So a little less than 25% of the revenue this last quarter. And to a large extent, we have to go out and hunt for the other revenue each quarter.

Bhavan Suri - William Blair & Company L.L.C., Research Division

So the contribution from the platforms today is pretty minimal. But if I look at the ramp you've had just in the reorders with the banks over time, and we apply something similar, do you think that the platform recurring revenue is incremental? I know, 5%, 10% in a fiscal year. I'm not asking for guidance, just sort of sense of how we should think about growth at that recurring base?

Russell C. Clark

Yes. I think, again, starting from the maintenance side, when you get into the license revenue category, there is some modest contribution from transactional revenues. Just to clarify, when you say platform, we think of the platform fee as the upfront term license fee, which gets recognized upfront. And then the transactional or usage components over time is making some contribution to revenue every quarter, but it's modest at this point.

Bhavan Suri - William Blair & Company L.L.C., Research Division

Okay. And then you guys have hit a lot of great targets with Photo Bill Pay and the Account Balance Transfer and things like that. One of the things we talked about a couple of years ago was this sort of opening up the platform onto Amazon and having other people kind of come in and create apps around the technology. Any progress on that front? And sort of how are you thinking about that opportunity of opening up sort of a broader ecosystem, an app store, so to speak?

James B. DeBello

Bhavan, this is Jim. We remain very focused on retail banking as a primary target of opportunity and serving the life cycle of the banking customer. As we talked about little bit earlier, everything from enrolling, to depositing your first check, to paying a bill and even shopping for a credit card. So Mobile Imaging really sort of envelopes that whole consumer life cycle. However, we have received a lot of requests from very innovative people and companies who desire to use our Mobile Imaging platform just as you speak about it. So we are taking that into consideration. We think that's a very interesting opportunity, and we'll have news about that, we think, in the future.

Bhavan Suri - William Blair & Company L.L.C., Research Division

That's great, Jim. That's most of my questions guys.

Operator

There are no further questions at this time. I would like to turn the floor back over to Peter Salkowski, Investor Relations.

Peter M. Salkowski

Thank you, Brock. Before closing the earnings call, I'd like to inform everyone that Mitek Systems will be presenting at the Needham Growth Conference being held in New York City from January 14 through the 16 in 2014. We'll publish a press release some time before the event, indicating the exact day and time Jim will be presenting. Thank you for joining us today for Mitek's Fiscal Fourth Quarter Earnings Call.

With that, I'd like to close the call. Have a great day. Thank you.

Operator

This concludes today's teleconference. You may now disconnect your lines. Thank you for your participation.

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